Senate Majority Leader Paul Gazelka is a bit surprised that Gov. Tim Walz and House DFLers are surprised that his caucus is not agreeable to tax increases.

The Nisswa Republican has been saying it since even before the 2019 session convened in January. He’s said it at nearly every opportunity since. And he reportedly says it frequently during the closed-door negotiations led by him, Walz and House Speaker Melissa Hortman.

No general tax hikes. No gasoline tax hikes. No other transportation-related tax hikes. No lifting of the end-of-the-year sunset on the provider tax. So far, only two fees have won approval of the Senate majority Republicans: an assessment on makers and distributors of opioids in response to the addiction crisis; and a smaller collection of fees on insulin makers for a program to provide insulin to Type 1 diabetics in an emergency.

That’s it.

“There’s not a middle ground on taxes,” Gazelka said Monday when asked how an apparent stalemate on the 2019-2021 budget would end. “That’s not the direction we need to go. We don’t think we need it, and we want to make the case to the public.”

Any deal, he said, will need to involve the money that state already has or will collect from current taxes. And the DFL shouldn’t be surprised at his unwillingness to consider tax hikes of any kind, he said. “I think I’ve been very clear,” he said.

What if they believe it’s all been a bargaining ploy and that eventually Senate Republicans will give compromise some on the revenue side, Gazelka was asked.

“They would be mistaken,” he said.

Yet Walz and DFL leaders continue to expect Gazelka to come to the bargaining table with some sort of proposal that would meet them somewhere between zero and the billions in tax increases they’ve proposed over two years, include the $1.3 billion in general tax increase, $1.49 billion in transportation tax hikes and $700 million a year in the provider tax.

Gazelka hasn’t done that. Instead, at a Sunday evening session in Walz’s office, he presented a 12-page treatise on where Minnesota ranks among the states in relative taxation (high) and the impact he thinks that has on economic growth (not good). It then compared the Walz tax proposals and the Senate plan to bring the state into conformity with 2017 federal tax law changes.

Special session?

That night mimicked the pattern of all post-negotiation press conferences so far this session. First Gazelka comes out and says no progress has been made and that he remains opposed to any tax increase. Then Walz and DFL leaders come out and lament the lack of compromise offers by the Senate GOP.

The tax stalemate spoils matters because DFLers need the increased revenue to make their budget plans work. Without it, the state budget will be one that carries forward current spending, save a few tweaks here and there.

DFLers have reached the point where they are speaking two phrases everyone at the Capitol has been trying to avoid: “special session” and “government shutdown.” If there is no budget deal by next Monday, a special session will be needed. If no deal can be reached by the beginning of the next fiscal year, July 1, a lot of state government would lack the authorization to spend money and would have to go into at least a partial shutdown.

“If they can’t compromise they’re the government shutdown party,” House Majority Leader Ryan Winkler, DFL-Golden Valley, said last week. “They have to compromise. That’s the nature of divided government.”

“Time is ticking,” Walz said. “I’m not asking for a proportional number but I am asking them to move to something in our direction.”

In response to some suggestion that Gazelka repeated Monday about using surpluses and savings, Walz said he doesn’t like that idea. Gazelka’s counter offer, one that House Speaker Melissa Hortman called “woefully inadequate,” on Monday, didn’t go there.

MinnPost photo by Peter Callaghan

Gov. Tim Walz: “I’m not asking for a proportional number but I am asking them to move to something in our direction.”

Walz complained about GOP “red lines” which he later acknowledged were all tax related. “Thirty five people saying no to everything is not government and it’s not compromise,” Walz said in reference to the number of Republicans in the state Senate.

What is the end game for the session if Gazelka holds his caucus to a no-tax platform?

“Not good, obviously,” Walz said.

“I only half facetiously mentioned at one point in time if I passed across the table a cure for cancer and said it would take you raising $10 million in revenue, they would say ‘No,’ because they are married to a philosophy.”

Something that is ‘very, very’ important to the GOP

Many of the GOP members ran on no-tax platforms and many — Gazelka and Senate Taxes Committee Chair Roger Chamberlain of Lino Lakes included — have signed the no-new-taxes pledge circulated by Americans for Tax Reform. There are likely far less than a handful of Senate GOP members who would vote for a tax hike, and they aren’t likely to buck their caucus to do so.

Gazelka said the DFL needs to look at recent legislative history. “We’ve not voted for a tax increase since 2005,” he said. “We did agree to a few fees now and then. But that has always been something very very important to us, that we are fiscally responsible.”

MinnPost photo by Peter Callaghan

State Sen. Roger Chamberlain

The Senate GOP, along with the House minority GOP caucus, thinks taxes in Minnesota are too high and the only way to bring them down is to not add to them, even incrementally. Gazelka has tried — perhaps without much hope of success — to convince the DFL that his compromise on taxes is not calling for cuts in rates.

The Senate budget depends on about $2.2 billion in general fund growth to increase the current budget from $45.5 billion over two years to $47.7 billion. The latest Walz spending offer is $49.3 billion and the House DFL, which had been higher than that, has offered to match the Walz spending level.

“We don’t just look at general fund taxes,” said Gazelka. “We look at all funds, all places where we’re asking Minnesotans to pay taxes or fees. We put that all into one big pot.”

The provider tax that was a bipartisan plan 27 years ago to help pay for a basic health insurance plan for the working poor that became MinnesotaCare. While many of those people were shifted to an expanded Medicaid under the Affordable Care Act, the tax followed them into the state general fund budget. It still pays for some MinnesotaCare subsidies, as well as for the GOP-sponsored plan known as reinsurance, which helps stabilize prices for policies on the individual and small-business insurance market.

Sunsetting the provider tax was part of a deal GOP lawmakers cut with then-Gov. Mark Dayton to end the 20-day, 2011 partial government shutdown.

“That was what we fought so hard for in 2011, that the provider tax would go away in 2019,” Gazelka said. “So for us to say that we’re going to take that back now when that was one of our big victories, that is why we’re so passionate about it. That was our victory in 2011.”

When the GOP had both the House and Senate in 2017, they added to transportation funding without increasing the gas tax. The method was to devote half of the state sales tax on auto parts to roads and bridges — $530 million this year — and also to use a large part of the biannual bonding bill to raise other funds for transportation.

That too is a victory the GOP isn’t likely to abandon. After Walz Monday cut his gas tax plan from a nickel a year for four years to four-cents a year, Gazelka again said the gas tax was a “dead issue.”

DFL won’t ‘roll over and play dead’

So what about those two drug-price related fees approved so far?

“We’re not terrified of new revenue,” said state Sen. Michelle Benson, R-Ham Lake, the chair of the Senate Health and Human Services budget committee. “We just think [the DFL tax plan] is a little out of line. Well, maybe a lot out of line.”

Walz was angry at the end of the day Monday when he said the Senate was moving further away, not closer. He was especially irate over Gazelka’s statement that the provider tax was still off the table.

“They talk about 2011 and they call it their victory; this is our biggest victory. Those were his exact words,” Walz said. “From an ethical standpoint … I know the repeal of the provider tax will hurt the most vulnerable among us and they have no plan.”

Winkler said it is unrealistic for the Senate GOP to think they can win on all contentious points. “Their only toe hold in state government is three state senators. No constitutional officers and a minuscule majority in the Senate,” Winkler said. “And they act like they have a mandate to club Minnesota education and health care back into the ground.

“If they expect the House and the governor who just won elections to entirely capitulate, roll over and play dead for a Republican ideology, they are very much mistaken.”

Comments (40)

Anti-government representation is much more damaging to public problem-solving than fair progressive taxation.

Don’t think for a minute that Republicans spend wisely- they do not.

The truth of the matter is that when we elect people to represent us who do not accept the very premise of the social contract, we elect people motivated to sabotage the very functioning of good government.

These folks have no need at all for government, except to get their salary and benefits. Citizens they represent? Fools to expect anything but obstruction and de-funding.

I thought Daudt was the designated government destroyer, but he is limited being in the minority.

I was a fool to not see Gazelka stepping up to be our own Mitch McConnell.

Yes, of course you’re right. Gas taxes hit everyone who needs to drive to work. Sixteen cents won’t fly with the Norquist pledge either. We do need a consistent funding source, though, because poor roads are also regressive- hurting those forced to drive the hardest.

Calling it a user fee might help the Rs support it. Are there any other ways to fund transportation maintenance and infrastructure spending that you would support?

I know of one state-aid highway that was neglected so long the base itself needed to be rebuilt, at many times the cost of maintenance.

Our collective state property, especially that which we all use every day, must be a primary legislative function. Yet year after year we cannot get a commitment for on-going money.

The problem is that the Republican Party is completely dependent on campaign contributions from people whose only political objective is to keep taxes low. Many of these contributors don’t live in Minnesota so are not affected by any decline in state services, and those who do live here are wealthy enough not to be affected by any such decline.

The political strategy for Republicans for a couple of decades now has been both simple, and sufficiently effective. Fight any tax increase, and blame Democrats and people who live in the cities and inner ring suburbs for any resulting problems. Along with paying lip service to social issues, this strategy has succeeded in attaining majorities in at least one house of the legislature, sufficient to block any affirmative DFL agenda. It’s the Republican upside of a polarized electorate.

Seriously, dude, the one and only fiscal policy the Republicans have had for decades now is no knew taxes or tax cut demands… and your “explaining” how that became a factor THIS year? This is the same impasse we had for decades, it’s as predictable as the sunrise, and this was predicted. Any time Republicans control a chamber or the Governors desk we will have a budget impasse revolving around the demand for tax cuts. This isn’t just important to Republican THIS year, this is an existential component of their magical thinking for decades now.

I just hope that if the author discussed the “surplus” in this article he pointed out the fact that there is little if any real surplus instead of simply repeating Republican claims derived from the pseudo-surplus; as if those claims should be taken seriously.

Dear Sen. Gazelka, “no new taxes” does NOT equal fiscal responsibility, and allowing a preexisting revenue source to dry up without replacement is most definitely not fiscally responsible.

The people of Minnesota have expectations for our state government to perform certain activities. Those activities need to be paid for. If you want to argue that some of these don’t need to be performed, then fine- but if you just don’t want to pay for it, too bad.

The reality is Minnesota voters elected Governors three times in a row who promised to raise taxes for health care, schools, roads and quality of life. The only reason the senate did not flip last election is there was no senate election, so this really is the last fight left for no tax advocates.

It is not accurate to describe Republican plans as no new taxes. It goes beyond that.

They want to give up a nearly billion dollar revenue source that allows the working poor to have health insurance. This is yet another Republican tax cut that increases the provider and insurer profitability by denying life saving services to Minnesota citizens.

At the same time, they plan to spend millions to subsidize middle and upper income households who buy individual insurance policies.

This is about remaking Minnesota into a state when wealthy elites make the decisions and get most of the benefits while the middle class shrinks, as more people cannot afford the basics of life.

Certainly the no new taxes thing has nothing to do with fiscal responsibility nor does it mean life is less expensive. What it does mean is that the cost of things higher taxes would have paid for are paid for in some other way, probably in a way that’s less efficient and more expensive. Minnesotans are the losers, but not the people who fund Republican political campaigns. They live elsewhere and have no stake in Minnesota’s quality of life.

Cities can always raise money through local referendum’s. I personally would rather have the choice to vote directly on weather i want my taxes increased than to just give the State more money. If my local city or school district gets voters to agree to increase in property taxes at least I know that money is going back to us. Not being redirected to Minneapolis or St.Paul.

Cities would NOT be free to raise their own revenue is Republicans had their way. Several time now they’ve voted to take that authority away from local governments. They’re intent is to push their Somalia model as far down into very nook and cranny of Government they can find.

How do you feel about Minnesota and other blue states subsidizing red states?

Closer to home, Saint Paul is near the bottom of the list on local government aid.

And if you think Jackson County can fix its roads by itself, or that rural hamlets can tax themselves to update their waste water treatment facilities or drinking water infrastructure without metro tax payers, you are sadly mistaken.

What is the problem with no new taxes when our state brings in record amounts of revenue every year? The DFL wants to increase spending nearly 10% and that seems to be okay by the author and those commenting. How many of you get to increase your spending by 10%?
The GOP has offered much more than the rate of inflation and they apparently get blamed for all of this. Such nonsense.
We went through $2 billion more per year under Dayton and the rest of the DFL recently. Now we are asked for $1.4 billion more. Just demanding more money from other people is NOT leadership. It’s basically theft. And they’re sitting on piles and piles of OUR money and it’s apparently not good enough.
When does it stop?

It goes way past “no new taxes.” The state GOP is hamstrung with a dead ideology that denies cultural, scientific as well as fiscal progress of any kind. They’re the political embodiment of the aged couple that is quite content to live out their days watching MeTV, the Weather Channel and musing about how great things were back in the “good old days.”

Fine then, after redistricting, when the power base of the GOP in this state is ever more diminished, they can enjoy permanent minority status. Its quite simple, the only reason they enjoy any say in the matter is that the Senate wasn’t up for election in 2018. They’ve had their last gasp of a decade, and now, barring malfeasance, they’ll enjoy the results their constant dismissal of the areas where people actually LIVE, in perpetuity.

Well stated, Matt. Although it wasn’t a priority of mine, just watching how Gazelka dismissed marijuana legalization, and the subsequent denial of the substantial revenue to the state’s coffers that would have come from it, illustrated how this session was going to play out. They have no ability to govern…period.

Give the republican senators what they want. No new taxes. Then reduce government spending in their districts to compensate for the loss of revenue experienced by the districts willing to pay for what the people need. I wonder how long it will take the people in Nisswa and Lino Lakes to realize thy can’t get something for nothing.

A few years ago, I was at an event that then Lt Gov Tina Smith spoke at. When she took questions, I told her that I agreed with Dayton’s plan for rural broadband, but that those communities that elected legislators who yammered on about “small government”, those communities should go the bottom of the list.

I would like to see a chart of some sort that would lay out the loss to the citizens of each separate senate voting district with this ridiculous no new taxes pledge. How much would each citizen lose locally or have to pay more for in school services if the the state did not augment school budget especially for special ed services for instance. On the other hand since the big losers will be the small towns and I live in city maybe I should not care but I do. I am tired on the state being held hostage to petulance of the gop.

Time to send an urgent request to the Koch Bros asking them to release their hold on the promise to continuing to “starve the beast”. As the Repubs are faith based and the Koch Bros are their leaders, why not go to the top? This is not a rational argument, it is about faith and the perks and funding the Repubs get from their “all expenses paid” faith leaders.

Obviously, this needs much more clarification in the next campaign season!

I’ll just echo the sentiment here… Republicans have long since become irreconcilable, there is no compromise beyond failed compromises that leave budget crises and necessary services in jeopardy. Republicans simply need to be defeated, and that day is just over the horizon.

You know I look at the republican stance “no new taxes” like not investing in your health until you have a heart attack! Instead of investing a few bucks and some time now to keep your self out of trouble just keep putting it off until something major goes wrong and then blame everyone else. This idea that the “R’s” are about kitchen table issues is crap,They are about resisting any investment in our future, the old neanderthal mentality! You can’t have rationale conversation’s with irrational people.

There will be a special session (again) — a government shutdown should follow. There is no compromise possible when ideology rules. The MN GOP is no different than the US Senate, where “NO” is the only word in their vocabulary.

This is kind of silly. Obviously if people subscribe to a sufficiently extreme ideology their ability to compromise is… compromised. This applies to extreme “centrism” as well when it only seeks to “compromise” with Republicans rather than liberals in it’s own Party. I don’t see the DCCC making a big effort to compromise with the progressive caucus, if you think that nothing to do with ideology you obviously mistaken.

“I often wonder how people who are anti ideology make policy choices. ”

The only people I know who claim to be anti-ideology are “moderate/centrists” who pretend to be looking for “practical” policies that combine “both” sides. They make policy decisions by assuming that no one has a good policy and best policies are the ones that fail to produce the best results… like Obamacare.

Gazelka the gorilla trumpeting NO for however many months does not make it gospel. Sort of like if you say the word “invasion” enough about the Southern border, ignorant people running like scared chickens wanting someone else to be in charge of their future — believe it’s real and maybe even ISIS.

Who’s fixing the potholes on Gazelka’s street? Or does he live on a gravel road that won’t need more gravel for 50 years?

I grew up on a farm and I remember well the sight of the bull with a huge ring in his nose being pulled around and around while he bellowed. And yes not unlike McConnell, who has wonderful guaranteed healthcare and a fat pension. Who cares what happens to everyone else?

As for the gas tax hitting the poor? Only if they drive a Hummer or large SUV or F-150, maybe one of each. And why would the Republicans Senators worry at all? They have per diem, which for most is just a bonus, given what they truly spend and need as reimbursement.

Maybe some can understand better if looking at it on a simplified level. First, let’s assume our MN Republican and Democrat leaders have policy positions based on what they truly believe is best for Minnesotans.

(I realize there are many who will have trouble with this initial assumption – but for the sake of argument, just try.)

Then, let’s use small and simple numbers that represent tax increases. 1 to 10. 10 equals a HUGE tax increase.

Now, let’s remind ourselves that the House has a Democrat majority. The Senate has a Republican majority. The governor is a Democrat. Fairly equal there, with a slight power presence to the Democrats.

Now, let’s say legislative Democrats put forward a package of proposals that represent their policy interests, and that package requires an overall tax increase of a “7” on our scale. The Republicans counter with their package which requires an increase of “0”.

Since each party controls one legislative body, it stands to reason that a compromise would result in a tax increase of “3” on our scale. Both sides win some things and both sides lose some. Arguably, most Minnesotans believe this is how it should work.

However, if the “0” side has leaders who made a “pledge” to a private organization that they will stay at “0” come hell or high water, the system breaks down. I haven’t heard that those in the “7” side have made any pledges that they will not come down – come hell or high water – from their “7”.

So, when end of session comes and no budget agreement is reached – and should there be a government shutdown later – who is more to blame?

Next time you are stuck in traffic, your car breaks down due to a road problem or you have an accident on a dangerous poorly maintained stretch of highway, remember that Republicans were unwilling to pass any new revenue to get caught up on our massive state wish list. And if you live in a rural community with low traffic volumes, prepare to wait until major projects are funded. Walz talks One State but if Greater Minnesota Republican legislators don’t want more taxes, that decision has consequences.

Then there is the provider tax. Republicans decided not to sunset it. Good move, as it would have thrown several hundred thousand voters off their coverage, including rural families already hurting due to Trump’s disastrous trade war. Republicans need to restore their credibility on healthcare, and not making what would have been an unforced error was smart.

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